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Johnson's Russia List


June 7, 1999    
This Date's Issues: 3329 3330

Johnson's Russia List
7 June 1999

[Note from David Johnson:
1. AP: Greg Myre, Russia Seeks Niche After Cold War.
2. Fred Weir: Pushkin.
3. The Hindu (India) editorial: Literary Pushkin.
4. Robert Devane: For the record/3327/The Economist.
5. Washington Post: George Will, Once a Great Power.
6. Reuters: Doing Business in Russia.
7. Boston Globe: David Filipov, US students embrace Moscow theater.
9. St. Petersburg Times: Anna Shcherbakova, Russia's Banking Elite Gather 
in St. Pete. 

10. The Guardian (UK): Martin Walker, Revealed: How deal was done in 
Stalin's hideaway.]


Russia Seeks Niche After Cold War
June 6, 1999

MOSCOW (AP) -- When the United States and Iraq were headed for a military
confrontation 18 months ago, Russian diplomats intervened to avert a
showdown, even if only temporarily.

After NATO began bombing Yugoslavia in March, Russia appointed itself as
mediator, and envoy Viktor Chernomyrdin's vigorous shuttle diplomacy helped
produce a tentative peace deal.

Russia, still searching for an influential global role in the post-Cold War
world, has at least carved out one odd niche: self-anointed broker between
the West and international pariahs such as Saddam Hussein and Slobodan

To some outsiders, Russia appears to making the best of a weak hand. The
country's Soviet-era clout is gone, but President Boris Yeltsin pushes for
Russian involvement in international crises -- while insisting he will not
sacrifice relations with the West.

Yeltsin now finds himself in an awkward position, maintaining a conspicuous
silence on the Kosovo peace plan that his envoy helped arrange.

Meanwhile, his domestic critics denounce the plan as a sellout of
Yugoslavia, and the military is bristling at the prospect that Russian
peacekeepers might serve in Kosovo under NATO's command.

``A very difficult step toward peace has been taken, but many issues are
still being resolved on purely NATO terms,'' Russian Prime Minister Sergei
Stepashin said Sunday.

At minimum, Russia feels its voice was ignored in a crisis raging in its
own neighborhood. But the larger theme is Russia's ongoing struggle to come
to terms with its loss of superpower status.

If Russia can play only a limited role in a conflict so close to home, how
can it expect to be a major actor in any global issue of war and peace?

Chernomyrdin, the one Russian figure to champion the peace plan, can point
to two limited successes.

The NATO bombing campaign, which appears likely to end soon, probably would
still be in full swing without Russia's intervention. Also, Russia
successfully lobbied for U.N. Security Council approval of any peacekeeping
operation. NATO launched its bombing campaign without explicit U.N.
consent, knowing Russia would have vetoed a call for force.

But Russian critics say Moscow bowed to virtually all other NATO demands,
and thereby increased pressure on Milosevic to capitulate.

After vehemently denouncing NATO's air campaign from the start, Russia may
be forced to choose whether it wants to send peacekeepers to Kosovo under
NATO's command or opt out.

Russia insists it won't put its troops under NATO officers. Western
countries are pointing to the Bosnian peacekeeping model, where Russian
forces cooperate with the Western-led operation.

But Russia and the West were still enjoying a post-Cold War honeymoon when
the Bosnia plan was implemented nearly four years ago.

Moscow's relations with the West soured when Russia's economy collapsed
last August. Fair or not, some Russians accused the West of doing too
little to help. The mood worsened when NATO added three members from
eastern Europe in March, just days before the bombing campaign began in

Russia has consistently condemned the West's use of force in Yugoslavia,
Iraq and elsewhere in recent years.

Yeltsin has led the chorus, but he's been equally insistent that those
conflicts not undermine Russia's broader relationship with the United
States and the West.

Meanwhile, NATO and Yugoslav generals met for a second day Sunday to work
out details of a Serb troop withdrawal from Kosovo. A Russian general also
took part as an observer.

The West says it welcomes Russian troops in a Kosovo peacekeeping
operation, but there's no sign yet that Moscow will receive special

``I have no doubt (Russia's role) will be resolved on a practical basis,''
Britain's Defense Secretary George Robertson said Sunday.


From: "Fred Weir" <>
Date: Sun, 6 Jun 1999 
Subject: Pushkin

By Fred Weir
MOSCOW (CP) -- Russia's greatest cultural superstar had a birthday
and the entire country, from government leaders to factory workers, poured
into the streets to celebrate it.
The only thing missing from the festivities was the celebrity himself.
Alexander Pushkin, something like a cross between William Shakespeare
and Wayne Gretzky in the Russian popular imagination, has been dead for 162
``Pushkin is our everything,'' President Boris Yeltsin said at a special
weekend Kremlin ceremony, where he handed out newly-minted Pushkin medals to
selected writers and artists.
``For us, Pushkin is Russia, the Russian language, its culture,'' echoed
Prime Minister Sergei Stepashin at a huge street ceremony in honour of the
mythical poet, novelist and bon vivant, born 200 years ago.
Such praise from political leaders might be suspicious if it were not
dwarfed by the tidal wave of grassroots Pushkinmania from an adoring Russian
``I seduced my wife the first time by quoting verses from Pushkin,''
said Georgi Grunenkov, a 43-year old manual labourer, one of hundreds of
of Muscovites who thronged the city centre -- completely closed to
traffic -- to mark the occasion.
``For me, he was the essence of what a Russian man should be''.
Weekend newspapers were all-Pushkin, from frontpage birthday greetings
for the dead bard to Pushkin trivia tests and crossword puzzles. Russian TV
ran mostly filmed versions of his work, dramatizations of his life and
learned talk shows about his continuing relevance.
Practically every second billboard in Moscow carried the curly-haired,
long nosed poet's profile, often coupled with an inspiring or patriotic
slogan. His image
was plastered onto vodka bottles, chocolate boxes and matchbook covers in
honour of the jubilee.
The great grandson of an African prince brought to the court of Peter
the Great, and scion of Russian nobility, Pushkin lived a wild, adventurous
life that could have been the model for his own fiction.
He died at the age of 37 after losing a duel, fought with pistols, over
the honour of his beautiful young wife.
``Pushkin shaped our literary language, and has to this day never been
rivalled,'' says Tatiana Voskovskaya, editor of Russki Journal, an internet
literary magazine.
``But his ongoing appeal to the common people comes largely from the
mythic quality of his life. He was a dashing hero that men aspire to be
like, and women still swoon over,'' she says.
Every Russian regime has tried to appropriate Pushkin as its own. On his
hundredth birthday a century ago Czar Nicholas I held a huge celebration in
Moscow that cast the poet as a staunch monarchist.
On the centenary of his death, in 1937, Soviet leaders heaped praise
upon his role as a pioneer anti-Czarist revolutionary.
The Yeltsin government, groping for legitimacy amid post-Soviet economic
crisis and social breakdown, obviously pulled out all the stops Sunday to
associate itself with the legendary writer.
But average Russians seem to need no prompting where Pushkin is
``Pushkin was Russia's greatest prophet,'' said Konstantin Skvorkin, a
21 year old photographer. ``There is nothing I know about life that I haven't
somehow found expressed in Pushkin''.
Of a dozen people between the ages of 14 and 73 questioned at random in
downtown Moscow Sunday, every single one could quote at least 3 verses of
Pushkin's poetry by heart.
The most prolific was the youngest, 14-year old Galina Aptekera, who
began reciting Pushkin's massive novel-in-verse, Eugene Onegin.
``I can do the whole thing,'' -- nearly 400 stanzas -- ``I learned it in
school last year,'' she said.
``Pushkin is the man of my dreams''.


The Hindu (India)
7 June 1999
Literary Russia 

THE EMERGENCE OF Alexander Pushkin as ``one of post-Soviet Russia's first
marketing schemes'' is an illustration of the truth of a French writer's
perception of Time as not always going forward in a straight line but also
curling into a circle to return to the past. The Pushkin anniversary
festivities are a demonstration of the magnificent literary past of the
country still remaining fresh in the minds of the Russians who are now
celebrating the 200th birthday of the great poet. Incidentally. the
simmering Russian recollections of Pushkin getting killed in a duel with
the French baron, Georges d'Anthes, when he was only 37 years old, are a
reminder of how the gun settled enmities among the ``gentry'' of the time
in England and Europe. (The guns targeting the rivals, according to
descriptions of the era, were fired at the same time and the lucky survivor
was acknowledged as the victor.) 

The fervour which has gone into the Pushkin celebrations could also give a
corrective to wrong perceptions of the ``real'' Russia of the proletariat
having come alive only after the 1918 Revolution, whose aims might have
been understood as bringing about a total break with the history and
culture of Czarist Russia. On the contrary, if the reprints of Pushkin's
writings have now brought about a run on Russian bookshops, it is an
indication of young Russia remembering with love and pride a great writer.
The sense of compassion which Pushkin brought to his writings was in fact
shared by almost all Russian writers, both pre and post-revolutionary, as
one could see even from a casual reading of the novels of Leo Tolstoy
(1817-1875). While his celebrated classic, Anna Karenina,was a daring
exploration of an enslaving passion, his other fiction took a close look at
human sentiments. ``Mother Russia'' is how the Russians have felt about
their sprawling country of cruel winters and blinding snow. Maxim Gorky's
(1821-1881) Mother, about the courageous old woman in revolt against
Czarist tyranny, was an illustration of the indomitableness of the human
spirit. His less well-known short story, Twenty-Six Men and a Girl,was a
moving piece on deception to which a brawny but guileless working class
could become a prey. Fyodor Dostoyevsky's (1821-1881) awareness of the
human predicament led to his intrusions into the darkest recesses of the
human heart in his great classics, the gripping Crime and Punishment and
Brothers Karamazov. 

Pushkin, who emerged on the Russian literary firmament earlier than these
writers, was emotionally quite close to them. His preference for poetry as
the more sensitive medium for writing could be attributed to the gentleness
which it could impart to what he wished to say with a felt authenticity to
bear out what an English critic wrote much later about the verse being the
true voice of feeling. The unmatched greatness of the verse which Pushkin
preferred was spelt out with a striking clarity by Boris Pasternak when he
wrote that a good poem about a stream brought it alive, as a warbling
presence, into the pages of a book, instead of being just a run of words.
The literary tradition which Pushkin shared with the Russian writers of his
time has persisted notwithstanding the pre-revolutionary, ``bourgeois''
milieu to which they belonged. The message from Pasternak, who wrote Doctor
Zhivago after more than 20 years of self-imposed silence, was that the
stirrings of the heart could not be indefinitely stifled by mindless
commissars. The present post- Soviet Russian political scene in which the
maverick Mr. Vladimir Zhirinovsky is an evolving presence could indicate
that revolutions cannot tear asunder literary traditions even if that is
the intended objective of ``liberators'' seeking to start writing history
on a clean slate. 


From: "Robert Devane" <>
Subject: For the record/3327
Date: Mon, 7 Jun 1999 

For the record, I'd like it to be noted that the letter in The Economist
undersigned by yours truly was thoroughly edited by by the fine folks at
The Economist. The original was a bit longer, and was really more geared
towards criticizing what I thought was a surface and mainstream view
expressed in The Economist articles, rather than singing praises to
Yeltsin. Unfortunately, I've not kept the original text of the letter. In
terms of the points made in the letter, especially with respect to the
Primakov government, I fully stand by them.

Best regards.
Robert Devane
Managing Director
Renegade Capital


Washington Post
6 June 1999
[for personal use only]
Once a Great Power
By George F. Will

When Napoleon said war is one of two occupations (the other, he said, is 
prostitution) in which amateurs often perform better than professionals, he 
meant that normal intuitions are sometimes more useful than technical 
expertise. Recently, White House and State Department sophisticates are 
giving professionalism a bad name, not least in thinking about Russia in ways 
that reasonable amateurs recognize as unrealistic.

By encouraging Russia to act as NATO's mediator with Yugoslavia, and by 
worrying lest NATO's actions rekindle Cold War tensions with Russia, the 
Clinton administration seems eager to resuscitate Russia as a great power. 
Russia clearly is susceptible to such delusions of recovered grandeur.

But reviving Russia probably is, for the foreseeable future, impossible. 
Russia is in a severe downward spiral, a spiral that cannot be quickly 
reversed because it is driven by a public health crisis without precedent 
since the Industrial Revolution.

So argues Nicholas Eberstadt in "Russia: Too Sick to Matter?" in Policy 
Review, published by the Heritage Foundation. Eberstadt, of the American 
Enterprise Institute in Washington and the Harvard Center for Population and 
Development Studies, reports, "Russia's health profile no longer remotely 
resembles that of a developed country."

In fact, "Russian men in their 40s and early 50s are dying at a pace that may 
never have been witnessed during peacetime in a society distinguished by 
urbanization and mass education." That is part of a pattern of mortality that 
has Russian deaths (approximately 2 million annually) exceeding births 
(approximately 1.3 million annually) by more than half.

Cumulatively, the catastrophe is akin to war. Measured against 1987, a 
relatively good year in the Soviet era, the recent "mortality shock" produced 
"excess mortality" during the four years 1992-95 that amounted to 1.8 million 
persons, more than the 1.7 million Russian soldiers killed in four years of 
World War I. In addition, there has been a sudden drop in fertility levels.

In 1997, life expectancy in Russia was, Eberstadt says, "somewhat under 67 
years," which is "distinctly lower" than in Mauritius, Ecuador or Azerbaijan. 
Life expectancy for Russian males at birth is around 61, below current 
estimates for Egypt or Paraguay. This is not largely the result of 
respiratory and other illnesses resulting from Russia's environmental 
"ecocide." Russia cannot cope with communicable diseases routinely controlled 
in most regions -- typhus, typhoid, cholera, diphtheria, tuberculosis. 
Eberstadt says that "the world has never seen anything like the epidemic of 
heart disease that rages in Russia," where the death rate from cardiovascular 
disease (heart attacks, strokes) alone "is higher than the death rate in the 
U.S. for all causes combined."

Russia has stunning levels of "accidents and adverse effects" (including 
suicides, murders and poisonings). These are often related to what clinicians 
call "psycho-social variables," such as attitudes, outlooks and stresses. 
These variables are not surprising in a Russia of rampant criminality and 
crumbling civil society.

Perhaps the most important causes of premature death are dietary habits and 
alcohol abuse. A national household survey -- self-reported, hence perhaps 
understated -- found that the more than 80 percent of Russian men who drink 
consume, on average, the alcohol equivalent of five bottles of vodka a week. 
In 1996 more than 35,000 Russians died from alcohol poisoning. America's 
annual toll is about 300. Given the "negative momentum" of Russian behaviors 
that are resistant to reform, Russia's population will continue to become 
more frail. In 20 years, probably only Bolivia, Haiti and Guatemala in the 
Western Hemisphere will have lower male life expectancies.

Today Russia's export revenues may not match Belgium's. Russia's 1997 per 
capita output was lower than Lebanon's and Peru's. Its GDP is approximately 
the size of the Netherlands'. In 20 years, Russia's economy, which now is 
approximately the 14th largest in the world, may be only the 20th largest.

Russia's health crisis is worsening as political-military power is becoming 
increasingly a function of "human capital" -- educated, disciplined 
populations managing information-intensive arrangements. Fifteen years ago a 
scholar warned against "delusions of Soviet weakness," saying: "Drunk [the 
Russians] defeated Napoleon, and drunk again they defeated Hitler's armies." 
Eberstadt replies: "Brave and regimented drunkards may have succeeded in 
marching on Paris and Berlin in the past, but they would fare rather less 
creditably today in, say, high-precision aerial combat."

In 1957 a beeping sound -- Sputnik: America had been beaten into space -- 
announced the Soviet Union's claim to ascendancy. Last week Russia announced 
that the space station Mir, the crowning achievement of the nation's space 
program, will be dismantled because of the economic crisis. That symbolically 
closed the parenthesis around Russia's episode as a great power. 


Doing Business in Russia

NEW YORK, June 6 (Reuters) - Russia's new prime minister, Sergei Stepashin,
has made a transparent and honest economy his top priority, but western
businessmen and academics say proceed with caution if you do business in

"Whoever is in Russia should bunker down, cut back on any of their
unnecessary expenses, realise that the revenues may not be there and hold
the beach, whether you are Russian or foreign," Peter Derby, president and
chief executive officer of Russia's DialogBank, told Reuters in a recent

Derby also suggested waiting until January 1, 2001. That date is six months
after the presidential election, where a myriad of candidates are expected
to run for the constitutionally powerful office Boris Yeltsin now occupies. 

"I would wait in most cases. It is still a very mess state and pioneers are
not given favours in this situation," Anders Aslund, senior associate at
the Carnegie Endowment for International Peace, told Reuters. 

DialogBank, which tried to cater to Russia's embryonic middle-class, was a
victim of the devaluation, and is itself winding down operations by paying
out its 25,000 middle-class account holders. Soon it expects to sell its
infrastructure to a European financial institution, Derby said. 

Derby would not say who would buy DialogBank, but did say the value has
dropped "to cents on the dollar" making the sale a small percentage of its
$45 million in book value as of January 1, 1998. 

Doing business, Russian style, was never an easy game to play for
Westerners flooding into Moscow after the fall of Communism, where knowing
people was significantly more important than products or strategic plans. 

Importers of western goods and services were slammed by the financial
crisis that came to a head in August of last year when the government
devalued the rouble, instantly putting imported products Russian's had
clamoured for far out of their reach. 

Business, however, continues to be good for one American icon in particular
because it is being run as a rouble-based business, despite the anti-NATO
invective that was unleashed after the bombing of Yugoslavia began on March

The first Russian McDonald's Corp. restaurant, opened in the centre of
Moscow on Pushkin Square January 31, 1990. Now with 49 fast food outposts
in Russia, Pushkin Square remains its top producing restaurant worldwide. 

"Russia continues to perform exceptionally well, the return on investment
is much higher than the norm, and to this day, Pushkin is still the number
one for us in the world," said George Cohon, senior chairman of McDonald's
Canada and Russia. 

"We're not making as much as before (in Russia), but we are making tens of
millions of dollars (in bottom line profit) and the reason is, we're in a
rouble-based business," Cohon said while making a stop in New York recently
to promote his book 'To Russia With Fries.' 

McDonald's has not been without its own Russian troubles. 

Since the devaluation, it has kept prices stable and continues to buy 80
percent of its raw food products with roubles from domestic producers, but
has scaled back its expansion plans from 25 restaurants to just five or six
in 1999. 

While McDonald's is by far not the only western business to still find
Russia a viable marketplace, its arch-rival Pizza Hut, was a noticeable
victim of the economic collapse. 

The fast food chain, a division of Tricon Global Restaurants Inc. , pulled
its operations out in October of last year. 

The devaluation, at first a devastating blow to the small Russian
middle-class as well as pensioners, has been a blessing in disguise for
domestic producers who were shut out by the flood of western imports. 

"What is happening now in the economy now is that a lot of manufacturing
and food processing is recovering very fast because of the devaluation,"
said Aslund. 

The sticky business environment both before and certainly after the
financial crisis is illustrated by Dandy AS, Denmark's leading confectioner
which established operations in the Northwestern Russian city of Novgorod. 

"We feel we're at a glass ceiling for Russian buying power and if there is
another devaluation we suffer," Philip Wegh, general director of ZAO Dirol,
Dandy's Russian operating company, said in a recent interview with Reuters. 

"The push now is for all of us to go with Russian suppliers for foodstuffs.
Quality questions stopped us initially, but we are working to improve the
situation," said Wegh, whose company makes the Stimorol and Dirol brands of
chewing gum. 

"The crisis has accelerated the process because it the only way to survive
now," he added. 

Wegh and Dandy are in a fierce battle with U.S.-based Wm Wrigley Jr Co. for
control of the Russian market. 

Wrigley already has a factory open near St. Petersburg and Dandy expects a
$100 mln facility to open this summer. 


Boston Globe
6 June 1999
[for personal use only]
US students embrace Moscow theater 
Cambridge performers take on Chekhov
By David Filipov

MOSCOW - For a while, it was the exchange program that dared not speak its

It was April in Moscow, and 19 exchange students from the American Repertory 
Theater in Cambridge were about to perform an adaptation of Chekhov's play 
''The Seagull'' at the Moscow Art Theater.

But openly anti-American sentiment was sweeping the Russian capital in the 
early days of the NATO air campaign against Yugoslavia. Just a few days 
earlier, someone had tried to fire a rocket propelled grenade at the US 
Embassy. Was it safe for a group of Americans to put on a play in Moscow?

Alexander Popov, leader of the group sponsored by ART, Harvard's Institute 
for Advanced Theater Training and the Moscow Art Theater School (MkhAT), took 
no chances.

''The shows were advertised as `Harvard graduates on the stage of MKhAT', '' 
Popov said. ''The word American wasn't in there. I was concerned for the 
students' physical safety. ''

As they were finishing up their time in Moscow last week, Popov and his 
students could laugh off that early anxiety. The anger in Moscow over NATO 
wore off quickly and things got back to normal - no one in this cosmopolitan 
city takes special notice of a group of foreigners in T-shirts walking down a 
central Moscow street speaking loudly in English. 

The work assignment was daunting enough for the young actors: Perform one of 
the famous works of one of the all-time great playwrights, on modern dramatic 
acting's most hallowed stage, in the city that is arguably a world capital of 

The show was the premiere of the first group to come to Moscow for a semester 
of intensive training and performing, the centerpiece of a groundbreaking 
two-year program in acting, directing, and theater management.

The program gives American theater students a unique chance to study with and 
perform under some of Russia's best-known actors, writers, and directors, all 
within the halls where the Stanislavsky system of acting was conceived and 

The students found themselves immersed in a culture where dramatic actors are 
widely respected and theater is at the center of intellectual life. 

''There is more reverence for the process here, '' said acting student 
William Church. ''There is huge pride in being an actor. ''

For all Russia's formidable economic problems, the government still supports 
the country's 430 theaters (200 of which are in Moscow). And while actors 
here do not make a lot of money, they are not waiting tables, either.

Popov explained that Russian acting students usually join a troupe 
immediately after graduating from theater school. Although the competition is 
fierce to enter, and stay in, an acting school like that of the Moscow Art 
Theater, those good enough to graduate always have work.

However, the Americans, who pay $32,000 to take part in the program, face 
professional uncertainty back home. It is hard for American theaters to keep 
permanent troupes; most actors are cast out of New York, hired for one or two 

''In America, unless you make it to Hollywood, you are going to be in the 
depths, working as a waiter, '' Popov said.

Many of the students, who begin their two-year program with a summer course 
and a semester last year in Cambridge, emphasized the intensity of the 
three-month program here.

Part of the reason was the emphasis on movement, an important element of the 
Stanislavsky system that seeks to turn the body into material through which 
an actor can express his feelings. That meant numerous classes in fencing, 
acrobatics, and ballet, a far more grueling regimen physically than the 
students were used to.

Part of the difference was the faculty itself. The program's Russian 
director, Oleg Tabakov, is also one of Russia's best-loved actors. Yury 
Yeremin, who directed the group's version of ''The Seagull, '' is a 
critically acclaimed director. Alexander Galin, a popular author and 
director, taught a class on set design. In Russia, these teachers are stars 
in their own right.

And then there is the history of the Moscow Art Theater, universally known in 
Russia by its acronym, MKhAT, which was once a creative home to Chekhov and 

''It's inspirational, '' said Greta Sanchez, an acting student in the program 
who comes from Venezuela.

The students also gained inspiration from the crowds that filled the small 
studio theater where their performances of Chekhov and Maurice Maeterlinck's 
''The Blue Bird'' were held, next door to the famous Moscow Art Theater. 

They were not alone.

''Just the name `The Blue Bird' on the walls of the MKhAT attracts interest, 
'' said Roman Dolzhansky, theater critic for the respected newspaper 
Kommersant Daily.

Alas, being taken so seriously comes with a price. Having outlasted 
Muscovites' anger over the bombings in Yugoslavia, the students ran into the 
wrath of some critics over their rollicking, good-humored performance of 
''The Blue Bird. ''

''The idea that young American students might be able to absorb the 
time-honored methods of the MKhAT in a matter of a few months is something 
many in Moscow view with irony, as they view the idea of American theater 
itself, '' Dolzhansky wrote in a scathing review.

But in person, Dolzhansky was more charitable.

''What I like about Americans is that they take pleasure in their own work, 
'' he said. ''These students played differently than the way Russians would, 
but so what? It's an exchange of ideas. It's interesting. ''

If, as Popov says, the main goal of the program is exposing American actors 
to the exchange of ideas, than such comments can be seen as progress. 

As for the mood in Moscow for the students' final shows last week, the 
undeniable sign of progress was the name up on the playlist, in bold: MKhAT 
American Studio.


From: "Tanya Samoiloff" <>
Date: Sun, 6 Jun 1999

June 07 1999

(Alexander Samoiloff)
>From the recent interview of Anatoly Chubais:
"I don't agree that the list of candidates is already completely formed as
Zyuganov-Luzhkov-Yavlinsky-Zhirinivsky-Lebed. I think that this is not a
full list. Many surprises may occur during election campaign. Governors can
move ahead. For example, Victor Ishayev [Governor of Khabarovsk Krai] - a man 
who proved by his action a skill to manage big territory."
Every week Khabarovsk TV issues a program "One Hour with Governor", where
Victor Ishayev reports about activities of local government and answers the
letters from received from people.
Regarding the above-mentioned statement of Chubais our governor said on TV,
that he "resents to be listed together with Zhirinovsky and Lebed".
According to Ishayev's opinion ".. president will not be elected among
those, who can work, but rather among those, who has opportunities to be
promoted, as election campaign involves huge funds provided by Oligarchs".
So, Victor Ishayev has no such opportunities, and also doesn't want to play
such bustle games.
According to Ishayev: "...a simple person from province, even if he is a
very talented one, would never become a president. I have enough skill and
desire, but have no big money".
Khabarovsk governor also rejected a rumor about his participation in
election block "Whole Russia". He was much surprised by this information in
press. Ishayev made a statement that he supports all reasonable parties and
movements, but has no right to be their member. "If I shall be attached to
one party, than I must push off others - said Ishayev - but my governor job
is to consolidate all forces for solution of problems. In this way, my only
party is Khabarovsk Krai people, and the only goal is development of our
At this point an old song comes to my mind:
Well, I was born in the US of A,
And I am coming back again
To the country, where each newsman
Can become a President.
(Alexander Samoiloff)


St. Petersburg Times
June 4, 1999
Russia's Banking Elite Gather in St. Pete
By Anna Shcherbakova

Central Bank Chairman Viktor Gerashchenko opened the Eighth Annual 
International Banking Congress in St. Petersburg on Thursday by warning 
Russia's troubled bankers that there will be fewer participants at next 
year's meeting if they don't restructure their banks. 

Over 400 participants attended the opening session of the congress, including 
133 banks from Russia and the Commonwealth of Independent States, the central 
banks of Belarus, Armenia, Estonia and Lithuania, 18 foreign banks as well as 
representatives of the International Monetary Fund and the World Bank. 

Unlike last year's congress, which focused on the globalization of financial 
markets, the theme of this year's congress is reforming Russia's banking 

"We would urge the banks to merge in order to meet our new requirements," 
Gerashchenko said, adding that, although the Central Bank would lead the way, 
reform will not be accomplished by administrative methods alone. 

"[Before the crisis], the Russian banking system did not abide by the 
principles of fair competition," Gerashchenko said. "The biggest banks became 
the first victims." 

Since 1997, the number of Russian banks has dropped from 2,500 to 1,500.

Gerashchenko said the crisis was not caused by Central Bank policies, but by 
the entire political and economical system. 

The problem with Russian banks is their lack of capital and the poor quality 
of their assets, he said. 

Central Bank deputy head Tatyana Paramonova said that the August crash 
revealed a startling discrepancy between the fast pace of development in the 
financial sector and the creeping pace in the production sector.

Paramonova said that the Central Bank has withdrawn 64 banking licenses this 
year, with an additional 32 currently under review. 

The Central Bank has revoked a total of 1,232 licenses since the commercial 
banking sector began to develop in the early 1990s, she said, adding that 
since last August, 103 depositors - both corporate and private - have 
petitioned to have the licenses of banks that have not fulfilled their 
obligations withdrawn.

Of Russia's 18 largest banks, only three have a positive balance of assets to 
liabilities, she said, without naming which three.

One bright spot, Paramonova said, was that the number of banks with foreign 
capital has grown since August from 26 to 30, while the share of total assets 
within the Russian system held by these banks grew by 150 percent. 

"The Central Bank approves of extending the role [of banks with foreign 
capital] and welcomes their involvement in the production sector," she said. 

Paramonova said that Russia's banking crisis was unusual because the largest 
banks became unstable while smaller, regional banks did not suffer as much. 
The opposite is usually true, she said. 

While other countries hit by financial crisis in the last 20 years spent 
between 3 percent and 30 percent of their GDP to restructure their banking 
system, Paramonova said, Russia simply didn't have the resources to solve the 

Russian Commercial Bank Association head Sergei Yegorov said that the 17 
billion rubles the Central Bank has allotted for restructuring the banking 
system is woefully inadequate. Yegorov said that 100 billion rubles would be 
a more realistic figure to get the job done.

The World Bank's director of Russian operations, Michael Carter, said that 
the most important thing to accomplish is the "careful removal" of insolvent 
banks from the market, while nurturing the solvent ones and improving 

The International Banking Congress is organized by the Central Bank and the 
Russian federal government and runs through Saturday at the Pribaltiyskaya 

The first International Banking Congress took place in St. Petersburg in 

. In Amsterdam on Wednesday, Ge ra schenko said that he is "optimistic'' that 
Russia will get a new loan from the International Monetary Fund. 

Speaking at a financial conference, Geraschenko said: "I'm keeping my fingers 
crossed that this will go through.'' 

Geraschenko said Russia didn't so much need the IMF's loan for the amount of 
cash, but said the agreement was necessary in order to deal with other 

Turning to the possibility of Russia itself going to the market for cash, 
Geraschenko said the Central Bank should be allowed to issue short term bonds 
in the wake of the government's default on treasury debt worth $40 billion 
last August. 

"If the papers from the Finance Ministry or government would not be 
acceptable [to the financial markets] at the moment, the Central Bank needs 
to be allowed to go to the market with short term bonds,'' he said. 

Legislation for those kinds of securities are among the bills that the Duma 
is considering this week.

Yeltsin, however, sent a letter to the Duma on Wednesday criticizing the 
legislation, saying he was concerned that under the legislation government 
credits issued to crisis-hit commercial banks could be used to buy the 

That would essentially mean that upon their redemption the Central Bank would 
be paying interest to banks on money that it had given them in the first 

"In the president's opinion, a situation like this in which federal resources 
are being pumped into commercial banks is absolutely inadmissible," the 
Kremlin said in a statement. 


The Guardian (UK)
5 June 1999
[for personal use only]
Revealed: How deal was done in Stalin's hideaway 
Martin Walker reports on the secret talks that led Milosevic to accept the 
peace plan

In the countryside just outside Moscow, where the closed side roads and KGB 
guards of the old communist elite have been replaced by the grim-faced 
private bodyguards of the new rich, one dacha retains the big green metal 
gates, the special troops in uniform, and the sinister reputation of the 

Through these gates of Joseph Stalin's Kuntsevo retreat on Thursday morning 
of last week came two motorcades. One carried Strobe Talbott, the American 
deputy secretary of state, a man with a passion for Russian history since he 
wrote a schoolboy essay on Pushkin and the Russian soul, who translated 
Nikita Khrushchev's secret memoirs while a graduate student at Oxford in 

The other carried Finland's president, Martti Ahtisaari, the European Union's 
special envoy on Kosovo. Inside the dacha was a billionaire. Viktor 
Chernomyrdin, former prime minister of Russia and former boss of the state 
energy monopoly Gazprom, had been selected by Boris Yeltsin as Russia's 

Chernomyrdin showed the two guests into a small room with three chairs around 
a table, and as the others sat, Chernomyrdin drew up a fourth chair. "That's 
for Milosevic," he said. "Whatever we say here, we had better not forget that 
he is part of this too." 

For Talbott, it was eerie, talking his fluent Russian in a room where 
Stalin's ghost lingered, with an empty chair symbolising the nearest Europe 
had seen to Stalin's heir. Two days earlier, Talbott had been informed that 
President Milosevic would be formally indicted as a war criminal by the 
international tribunal at the Hague. 

"We kept turning to that empty chair during the talks, and asking 'What would 
he do? How would Milosevic react'," Talbott confided when he returned to Nato 
HQ in Brussels the following day. 

That day of talks in Stalin's dacha seemed to have got nowhere at the time. 
Only now does it emerge as a pivotal moment in the move towards peace, 
because it convinced Chernomyrdin of two things. 

The first was that the Americans, and Nato, would not back down on their 
terms. "Our bottom line is that all the Serbs, or almost all, have got to 
leave Kosovo. And they have to be replaced by a international peacekeeping 
force with a clear Nato chain of command and with Nato at its core," Talbott 
stressed. "That is it. No compromise on those points. No negotiation with 
Belgrade. We are not talking to Milosevic except in one language: bombing." 

The second truth that Chernomyrdin recognised was that there would be no 
dividing the hawks from the doves, no real gap between the Americans and the 
Europeans which Moscow could exploit. 

This surprised the Russian, who had expected a more emollient approach from 
President Ahtisaari. Finland, occupied by Russia throughout the 19th century, 
and invaded by Stalin in 1939, had learned to play the neutrality game with 
something close to genius. One of the four EU member states which was not a 
member of Nato, Finland was expected to play a compromise role. 

But Ahtisaari was not that neutral. He was a close friend of Talbott's 
brother-in-law, Derek Shearer, who had been US ambassador to Finland. And 
Ahtisaari had been born in Vyborg when it was still a Finnish border town, 
before he fled as a boy with his family as refugees from Stalin's 1939 

A veteran diplomat who had worked in the UN and spent 11 years talking to an 
intransigent apartheid regime, Ahtisaari helped steward the UN-brokered 
independence talks on Namibia to success. Also a veteran of the European and 
UN mediation efforts in Croatia seven years ago, Ahtisaari was picked by the 
German chancellor, Gerhard Schröder, to be the EU's special envoy. Schröder 
assumed the talks would go on into July, when Finland took over the rotating 
EU presidency from Germany. 

In the dacha, Chernomyrdin had three proposals, which he said would be enough 
to persuade Milosevic to accept the peace terms agreed by the G8 foreign 
ministers in Bonn. 

First, Russian troops should take care of the northern zone of Kosovo, where 
most Serbs lived. Talbott refused; that threatened a kind of partition of 
Kosovo, which would itself contravene the G8 principles. 

Second, while the Russian thought he could convince Milosevic to accept some 
Nato troops, perhaps they should come from Greece and Portugal, which had not 
taken part in the bombing, along with neutral troops from Finland and Sweden. 
The presence of British or American troops would make a deal impossible for 

"Forget it," Talbott said. Nato troops were part of one command, without 
national distinctions. But Bill Clinton's old Oxford room-mate noted that, 
for the first time, Russia was accepting the principle of Nato troops. That 
must have been said with Milosevic's approval. 

Chernomyrdin then made a threat couched as an appeal. This was a critical 
moment for Russia's relations with the west. He desperately wanted 
partnership and the west's economic goodwill, but the disappointments of 
Russia's experiment with capitalism and the Nato bombing was plunging Russia 
back into permanent hostility. This was the last chance - if these three men 
could not agree on a common position, then he would have to walk out of the 
talks, Russia would abandon its peace effort, and Moscow's anti-westerners 
would rule the roost. Was Milosevic worth that? 

Chernomyrdin then appealed to the Finn, saying he accepted Nato troops would 
have to be part of a peacekeeping force alongside Russians. But there had to 
be a UN mandate - as a former UN diplomat, Ahtisaari should surely agree with 

Of course, replied the Finn. But as a practical matter, only Nato had the 
troops, the logistics and the command system to make a peacekeeping force 
work, and to organise the refugees' return. 

Chernomyrdin flew to Belgrade alone, stopping briefly to call Yeltsin and 
tell him there was no shifting Nato or the Europeans. But there were two 
crucial breakthroughs in principle, Chernomyrdin said. First, Talbott had 
accepted that some Serb toops could remain in Kosovo, to guard the Serb 
monasteries and monuments. Second, both the Finn and the American accepted "a 
major role" for Russian troops. 

In Belgrade, where Chernomyrdin was told the rumour that Milosevic had been 
briefly hospitalised - accounts differed whether it was a stroke or heart 
attack or nervous breakdown - he told the Serb leader that these two western 
"concessions" might be just enough to get a deal on the G8 terms. Would 
Milosevic agree? 

There was no love lost between the two men. Yeltsin had never forgiven 
Milosevic for his premature recognition of the coup plotters in the 1991 
putsch that overthrew Gorbachev. And Milosevic had no faith in the 
pro-western Chernomyrdin since the Russian cancelled a trip to Belgrade after 
the bombing of the Chinese embassy to fly to Beijing instead, and then return 
to Moscow to see Talbott. 

"Chernomyrdin just wants to get Russia back into the west's good graces. So 
every Nato bomb that falls on us has a Russian stamp on it," Goran Matic, a 
powerful minister without portfolio in the Left party run by Milosevic's 
wife, had sneered. 

But Milosevic, having warned that talks might have to be held in the secret 
location of the Belgrade yacht club to avoid Nato bombing, agreed to make a 
deal on the G8 terms. The Americans believe he did so because of the grim 
news from the battlefront. 

The Kosovo Liberation Army, which had already opened one road from Albania 
into territory they held near Pec inside Kosovo, were opening another to the 
south, towards Prizren. The Serbian 125th motorised brigade, battered by Nato 
air strikes, could not hold them. The Serbs ordered in reinforcements, the 
52nd artillery brigade and the elite 63rd paratroop brigade. They were 
desperate to stop the KLA taking control of the crucial road between Pec and 
Prizren, but Nato air power was decimating their ranks. 

Only this week Nato spokesmen began calling it "the hogpen", where Serb tanks 
and guns were being destroyed as soon as they moved. But by the time 
Chernomyrdin came to Belgrade, Milosevic had finally understood what the full 
weight of a Nato armada of 1,200 aircraft could do to his troops in Kosovo. 

But when Chernomyrdin rang Talbott and Ahtisaari to say Milosevic agreed the 
G8 terms, they said it was not enough. Milosevic's small print still insisted 
on keeping 10,000 Serb troops in Kosovo, and refusing British or US troops. 

At that point, Yeltsin stepped in. Last Sunday, he called Chernomyrdin to a 
meeting with his new prime minister, Sergei Stepashin, and said he wanted a 
deal on the best terms Nato would offer, so long as it meant a swift end to 
the bombing. 

Chernomyrdin arranged another meeting, in Bonn. When Chancellor Schröder rang 
Ahtisaari to offer the venue, the Finn warned he saw little chance of 
success. But after his meeting with Moscow, Chernomyrdin was upbeat, telling 
the Finn he was "97% sure you will come with me to Belgrade". 

The meeting at the Petersberg conference centre on a hill overlooking the 
river Rhine and Bonn, went on until 4am. Everything important was agreed - 
the Serb withdrawal, the return of a token "few hundred" for liaison, the UN 
mandate, the predominant Nato presence among the peacekeepers - except for 
one sticking point. The Russian military advisers with Chernomyrdin refused 
Nato command and control of the peacekeepers. 

Chernomyrdin tried for a compromise, proposing a neutral commander for the 
force, a Finnish general, to operate under a UN mandate. 

"I want you to come with me to Belgrade tomorrow to see Milosevic and put 
this plan to him. I am convinced this will end the war," Chernomyrdin told 
Ahtisaari. "This is the gesture Milosevic needs to accept the principles we 
agreed at the G8 meeting. This is the only way he can accept Nato troops." 

Ahtisaari refused. The Americans would not accept such a deal, and nor would 
the European Nato allies. The EU, having declared that the Nato mission and 
its bombing were "necessary and warranted", was not going to take a separate 
line now. 

Talbott made one final, telling point. President Clinton had arranged to meet 
his joint chiefs of staff the next day to discuss options for ground 

At 4am on Wednesday, they took a break, and when they reconvened at 9.15am, 
Chernomyrdin tried and failed to reach Yeltsin by phone, and went out on a 
limb. He overruled the generals with him, and accepted the Finn's proposal to 
leave the command arrangements for later Nato-Russian consultations, and put 
their differing interpretations into a footnote. 

That was enough of a common position for the Russian and Finn to go to 
Belgrade. Talbott then briefed the White House and Nato that he thought they 
might just get a conditional agreement from Milosevic - or the Russian 
generals might persuade Yeltsin to withdraw Chernomyrdin's mandate. 

The Russian and Finnish planes heading from Bonn to Belgrade were delayed by 
a Nato air raid. When they landed, they were taken straight to a meeting with 
Milosevic, and Ahtisaari read out the terms. This was the only deal on offer, 
he stressed. He had no authority to improve it. The choice was to accept it 
now, or suffer more bombing - and possibly a ground invasion - and accept it 

Milosevic asked two questions. Would the UN be the authority in Kosovo rather 
than Nato? Yes, said Ahtisaari, but Nato would have operational command. The 
second question was whether the Rambouillet text, which Belgrade rejected as 
a "diktat", was still operative. It had been superseded by the G8 deal, said 
Ahtisaari, and Milosevic sat back and half-smiled. 

That was it. No more questions, no more haggling. The question of his war 
crimes indictment had never been raised. 

Ahtasaari, exhausted, went to bed, saying whatever the Serbs decided, it had 
better be soon. He would leave no later than 4pm the next day. 

Milosevic that night held a meeting with advisers and other Serb political 
leaders, who agreed to convene the extraordinary session of the national 
assembly the next day. At that point, Ahtisaari realised it was make or 
break; Milosevic wanted political cover, either to accept or reject. 

In "the hogpen" in Kosovo, the Serb paratroops were pinned down, their 
mortars hit by warplanes as soon as they opened fire, and the 52nd artillery 
had lost almost half its guns. Milosevic folded, and Nato had won its first 

In Tirana, they were holding the Miss Albania beauty contest. A 19-year-old 
Kosovo refugee, Ara Mustafa, won. "This goes to show that Albania and Kosovo 
are one people, one nation," she declared as she was crowned. 



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